Consumers are at the heart of any modern business' success; their purchasing preferences, buyer loyalty, and customer referrals can truly make or break an enterprise.
Therefore, for this reason, it is imperative that you, as a business owner, become well-acquainted with the behaviours and opinions of your target consumer base, both before launching your new venture and throughout the course of its development. This exercise is called market research.
How to Conduct Market Research
Before we get into the specifics of how to identify, collect and analyse this information, though, it's prudent first to understand what exactly it entails.
Market research is the process of collecting and evaluating valuable information regarding a business' main customer groups and market. The objective of this research is to determine the demand for new products or services, measure brand affinity, identify buyer issues and highlight key differentiators. Entrepreneurs can also draw conclusions on relevant industry trends and emerging market opportunities from this process.
This helps business owners forecast the success of a new business, build and adjust their customer-facing strategies, and remain competitive.
As a guide, these are the key steps that you should take when conducting market research:
1. Define the Target Audience
Your company should begin by building a profile of your ideal consumer. Details such as age, gender, level of education, income, location and profession should all be included here.
This profile allows your enterprise to engage with, and evaluate, the correct audience throughout your market research efforts, and thus ensure that the results are relevant to your particular business.
Ongoing research throughout the growth of your company can reveal the precise demographics of proven buyers, allowing for more accurate targeting in future efforts.
2. Collect and Review Internal Data
Applicable if your business has already commenced operations, reviewing internal data is invaluable in analysing the past and current behaviours of existing consumers. Various internal data sources can be utilised here.
For instance, the investigation of sales data will reveal details regarding your company's customer lifecycle, and the current lifetime value of buyers. Moreover, you will be able to discern your most popular products, potential product bundles, and average order values. This information is useful in evaluating the profitability of existing sales models and product portfolios, as well as projecting future results.
Examining company website traffic data, meanwhile, will provide insight into the digital browsing behaviour of your customers, as well as wider online audiences. This practice may also show site conversion rates and key drivers. Conclusions drawn from this data can help you to improve your website user experience, optimise search engine rankings, and increase traffic sources.
Utilising internal data is considered to be primary research; research conducted firsthand, using owned data.
3. Gain Customer Feedback
Valuable information can be obtained from buyers, capturing their feedback, experiences, concerns, and key asks. This crucial element of market research enables you to view your strengths and weaknesses through the eyes of your consumers, supporting you in making the necessary modifications to increase customer satisfaction and positively impact loyalty.
Consumer feedback can be collected directly via online surveys deployed onto your company website, email surveys for new buyers, customer phone calls, in-store feedback forms, direct buyer interviews, social media polls, and digital customer service forums.
You may find it beneficial to launch competitions around feedback surveys to encourage buyers to participate, offering them the chance to win gifts or vouchers if they do so.
4. Organise Focus Groups
Organising focus groups is instrumental in conducting well-rounded market research. This professional exercise involves gathering together a select group of prospective customers to discuss their perceptions of different areas of your business and may touch upon your products, market approach, advertising, marketing, customer service and more.
Held in a comfortable environment where participants feel free to share their honest thoughts and opinions, focus groups allow you to hear direct and unfiltered feedback from your customer base. Consequently, this will enable you to come to valuable conclusions on how others regard your business.
Focus groups can be organised and conducted with the support of professional moderators, or by business owners themselves.
5. Obtain Employee Feedback
Another critical resource that you have access to internally is the opinion and feedback of your employees. Obtaining the comments of members of staff offers a unique, intimate look into topics such as internally perceived customer sentiment, customer support practices, reputation monitoring, and, certainly, internal satisfaction.
Collected via online or offline feedback surveys, your employees' feedback should be analysed and addressed as carefully as customer comments. Identified business challenges should be further explored by you or your senior management, while areas of opportunity must be validated and considered.
Make feedback submissions anonymous, too, to give workers the peace of mind to share their honest opinions and without fear of being questioned or contradicted by their management.
6. Collect and Review Industry Data
In addition to primary research, you should also make use of secondary research; data already collected by other parties, and made available to business owners.
Many market research firms share their industry reports and findings with paid subscribers to their services, consistently offering information on industry trends, consumer behaviour and spending, as well as market developments and conditions. Governmental reports, available free of charge to the general public, can also provide relevant information around particular aspects of the local economy, niche industries, and national consumer patterns.
Though a cost-effective and time-efficient way to obtain data, particularly compared to undertaking primary research, you should always ensure the credibility of secondary data before investing your time and money into evaluating it. Stick to accredited sources to ensure the information's accuracy, and cross-reference this with prior primary findings where possible.
7. Monitor Your Competitors
Consumers will continually compare brands to their key competitors, evaluating which they should invest their money into. Therefore, learning more about your industry competitors will reveal what your target consumers are exposed to, and offer a better understanding of how to differentiate against such brands.
This process begins by listing your main competitors. You can then identify their strengths and weaknesses by executing a basic SWOT analysis on each. Gauging consumer response and affinity to these businesses is also essential here. Next, you should compare these elements to those of your own business and identify any areas of opportunity that your competitors are not perceived to be fulfilling. Building on these critical differentiators is crucial to continued market success and consumer preference.
For more intricate competition monitoring, you might also hire the services of a professional research agency. These companies delve into the marketing and advertising techniques adopted by competing brands, and review topics such as online search marketing results, and exclusive search keywords rankings.
8. Review Your Research Conclusions
Intelligence obtained through market research is only useful to your business if you make decisions based on the results of this varied feedback.
Therefore, you should work to build an action plan to address the main concerns identified and invest in any significant areas of opportunity unveiled. Based on the feedback of both your buyers and employees, you can determine how best to improve your corporate messaging, marketing, advertising, channel coverage, products, delivery, services and route-to-market strategy.
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Market research is a fantastic way to ensure that your customer-facing strategies are closely aligned to market needs, capture consumer preferences, and take advantage of industry opportunities. For this reason, thorough research exercises should be conducted before, and following, the launch of any small business.
Using a combination of both primary and secondary research will contribute to the collection of diverse, valuable market research results. You should also reach out to a variety of existing customers, potential buyers, and internal employees to obtain enlightening insights, from which you can take significant strategic decisions for the benefit of your company.
What other marketing research tips would you offer? Let us know your thoughts in the comment section below.